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Album Sales Continue Decline, Music Streaming Rises in 2014

Streaming continued to be the big story in music consumption during 2014, as sales in both physical and digital formats experienced ongoing flattening, according to year-end figures from Nielsen Music.

Breaking out the year’s strongest numbers, Nielsen Entertainment senior vp of industry insights David Bakula said in a statement, “Digital music consumption continues its robust growth, with on-demand streaming up 54% over last year and 164 billion song streams being played by music consumers in 2014. Although overall music sales are showing declines, vinyl album sales were up 52% in 2014, shattering last year’s record-setting total by more than 3 million LPs.  In 2014, Vinyl album sales accounted for more than 6% of all physical albums sales.”

On the digital album front, Taylor Swift’s “1989” and Disney’s “Frozen” soundtrack were the only titles to move more than 1 million, shifting 1.41 million and 1.26 million respectively.

The steep decline in digital song sales was reflected in the fact that just one track sold more than 5 million units during the year: Pharrell Williams’ “Happy,” which tracked 6.45 million units. In 2013, three songs passed the 5 million mark: Robin Thicke and Pharrell’s “Blurred Lines” (nearly 6.5 million), Macklemore & Ryan Lewis’ “Thrift Shop” (6.14 million) and Imagine Dragons’ “Radioactive” (almost 5.5 million).

The continuing alteration of the way Americans consume music was reflected in Nielsen Music’s decision late last year to reconfigure its weekly ranking of the nation’s top albums by compiling data comprising streams, physical sales and so-called “track equivalent” digital albums. Since its initiation of music tracking in 1991, the metrics firm’s SoundScan unit had used physical album scans to formulate its chart.

Streaming was the most important growth slice of the music pie, which a big year-over-year gain above 2013, when streams increased 32% to 118.1 billion units.

LP sales saw the largest lift since Nielsen SoundScan began tracking sales, and showed year-over-year growth for the ninth consecutive year. However, as Bakula noted, vinyl albums still claim only a small percentage of music sales; the format had been entirely supplanted by the compact disc when Nielsen started up.

In the big picture, consumers continued to take to their computers and mobile phones, as the purchase of music in both physical and digital form predictably slumped for yet another year.

Total album sales (including CDs, cassettes, LPs and digital albums) slipped another 9% to 257 million, down from 289.4 million in 2013 (when an 8% decline was registered). Digital albums witnessed a 9% drop last year, down to 117.6 million, after a flat performance of 118 million the preceding 12 months.

As previously reported, Taylor Swift’s big fourth-quarter pop hit “1989” was the year’s biggest-selling release at 3.66 million, wresting the crown from “Frozen”  (3.53 million) in the last week of the year. Just two other albums sold in excess of 1 million during the year: British pop singer Sam Smith’s “In the Lonely Hour” (1.21 million) and a cappella act Pentatonix’s Yule package “That’s Christmas to Me” (almost 1.14 million). The compilation soundtrack “Guardians of the Galaxy: Awesome Mix Vol. 1” rounded out the top five with total sales of 898,000.

Three of the year’s bestselling albums – “Frozen,” Beyonce’s self-titled release and Lorde’s “Pure Heroine” – were issued in 2013.

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